The Federal Reserve just came out with its latest announcement that holds the keys to your financial future. Jerome Powell had his big meeting and understanding what he said, holds the keys to determine if your business will survive or thrive, if your job will pay you more or you'll be on the unemployment line, and ultimately, what's your assets, your home price, and your retirement looks like in the long run. It's pretty insane when you think about what is going on.
But this is the world that we live in now. Before I dig into that, if you just tune in, you're listening to the Mark Moss Show. I talk about the way the world is changing, breaking apart into globe deglobalization, and we look at it through the lens of politics, finance, and technology. Today we're looking at mostly the financial side, maybe a little bit of the political decisioning as to
what is driving this financial movement. And unfortunately, we're forced to understand this, We're forced to pay attention, and we're forced to take action on this, or we can choose to put our head in the stand and ignore it. However, say that an ostrich can put its head in the sand. But it doesn't keep it from being eaten. One of my favorite authors, Ian Ran would say that you can choose to ignore reality, but you can't ignore the consequences
of reality. Now, my story goes that, you know, I got out of high school, I started buying bank owned properties right off the bat, fixed and flipped a bunch of properties, built up a whole bunch of properties, sold a couple of businesses, and I was basically retired. And then two thousand and eight came and wiped me out. And part of the reason why is I was so focused on making money. I was really good at building
businesses and exits and making money that way. But I wasn't paying attention to the business cycle, the debt cycles, and what the Federal Reserve was doing. It wasn't even on my radar. I didn't know about the Federal Reserve. I didn't I knew about it. I didn't think about it. But unfortunately, my head was in the sand, and unfortunately the games that Wall Street played with the Federal Reserve did pumping up the housing market. The games that Wall
Street played had an effect on my life. They hate me even though my head was in the sand, and so I've sort of made it my mission ever since then to understand first of all, what was going on. And for the last five six years now, I've been talking to you about what is going on so you don't suffer the same fate that I did. And so we have to look at this. Shout out to Ron Paul who sort of led the charge on in the FED, in the FED and the FED that put a lot
of attention on the FED. And here we are looking and talking about the FED. So I'm going to break down what the FED just did and it sort of sent the markets into a little bit of a tail spin, although they appear to be coming out of it now. But I want to talk about, regardless of what happens this month or next month, we understand what is going to happen because there's such thing as true constraints. I'm
going to break down what these true constraints are. Why there's a there's a wall, there's a wall they can't get through. Now, there's some limited flexibility within those walls, which is where we see them operating today, but the walls are there. We're gonna break down that, and then we're going to talk about why the Federal Reserve and the US Treasury are fighting as opposed to working together, and ultimately how the Treasury is forcing their hand into
action in a way they don't want to go. We're going to break all that down now to break to kind of kick this off, let's just talk about the fo MC meeting. That is the meaning where the Jerome Palle ahead of the rowerser comes out and basically again tells us our fate, sort of like what is that Groundhog Day where everybody watches TV. Does he punks the
Tony phil the groundhog? If he comes out and if he sees his shadow one way or the other, it tells us spring is coming or spring's delayed or something like that. I've never really bought into it too much. I remember the movie Groundhog Day, but that's sort of what we see. We see Jerome Powell come out, and does he see his own shadow? And will we be in winter longer than we expected? Will we be in
a quantitative tightening cycle longer than we expected? Or will he bring spring back and go back into a quantitative easing cycle, ease monetary policy and allow things to flourish again. You can think about the tightening and the easing sort of like the winter in the summer. This is the spring, right, and so that's sort of what we saw. Now. The market has been predicting that we would see six rate cuts, the FED lowering rates, making the price of money cheaper
six times in twenty twenty four. The Federal Reserve Drome pal has been saying, no, no, no, no, you guys are wrong. It's only going to be three. Now, I am saying, what difference does it make if it's three or six? What ultimately matters is the total amount of movement, Meaning do we get a point and a half of
movement this year? And if we get a point and a half, does it come through three half point moves or does it come from six quarter point moves or whatever the math is on that, And that doesn't really matter, right, it's the overall size of the move now if they move slower, And this is exactly what happened in the media esterday, Jerome Palace sort of came out and he did what we call FED speak or what we call jab owning the market through talking, he's influencing, he's moving
the markets based off of this, and so he's saying we're going to do less. The market is saying we're going to do more, and after being very dubvish, meaning sort of signaling that they're going to be easy in monetary policy. In December, the markets have been taking off. The real estate market took off, the stock markets are doing good, bitcoins holding up, oil, all of these things. Gold is doing great. And I think the market started getting too far ahead of itself. And so Jerome Powell again,
the job owning isn't always doing something. A lot of times it's just saying something. We can look back to October when they really talk the market down. So they started talking about how they've done enough, how they're going to start easing, and just off of that talk, it pushed the market into rally into the end of the year. Then the markets started getting too far ahead of itself. Too much asset price inflation. People are spending too much money,
as known as the wealth effect. Right when your house goes up in value, when your stock account, your retirement account goes up in value, you feel more wealthy, you feel more optimistic about your future. When that happens, you spend more money, You go out to the nery book davocation. Likewise, the opposite happens. When your house loses value, your stocks lose value, things like that, you feel more broke. Even though you don't need that money for decades, potentially, you
still feel more broke. You still feel more pessimistic, and then you naturally spend less money. And so the FED has been trying to fight inflation, and so they're trying to control us and not allow us to spend too much money to push inflation up. But at the same time they're trying to walk this thin line of not
crashing the market. So that's where they're operating. These are the constraints they're operating between one not letting the over exuberance and people driving the market back up, but at the same time not pessimism and then pushing the market back down. Pushing the market down would be deflation at price going up are inflation. That's the battle lines. These
are the walls that they're playing within. The problem is they have natural constraints, and the natural constraints are really lined out between the battle that's being fought right now, Wager, the war that's being fought between Janet Yellen at the US Treasury and Rome Power at the Federal reserve. I've talked about this extensively on my main YouTube channel, Mark Moss. If you watch that. If you don't watch it, video should go check it out Mark Moss. You can just
search Mark Moss. FED in the Treasury fighting each other. But this is all playing out right now. I want to lay out sort of what these true constraints are so you can sort of understand this. Then we're going to talk about how the Treasury is forcing the Fed into action that they don't want. Before we talk about forcing their action, let's just talk about what these true
constraints are. So we've heard a lot as the FED went on the fastest rate hiking cycle in history, a lot of people would say that, well, they're going to raise rates until they break something. So what does that mean till they break something? Well, there's lots of things that could break. So, for example, as the FED raised rates at the fastest rate in history, that made the price of money more expensive. It made the bonds or the debt worth less, and so we saw banks start collapsing.
In March of twenty twenty three, we saw three banks collapse in a matter of weeks or days. As a matter of fact, totally more than the bank collapse in two thousand and eight and the FED was forced to start easy. Now, technically they stayed in quantitative tightening, although they were easing by adding liquidity to the market. Now, this is the point that I really want to hit on here for a second. Pay attention to this because you have to understand the difference of doing something and
doing something. What do I mean by that? A lot of very smart analysts and honestly smarter than I am, that understand the inner workings and plumbing of the financial markets, which are very complex, way too complex in my opinion, they shouldn't be that way. They understand it better. However, they get too technical, and I believe they're factually correct,
but intellectually dishonest. What does that mean? They're factually correct, they're going to say, well, look, the markets went up and caused inflation, but the FED didn't do anything, meaning they didn't lower rates, they didn't inject money, and so factually they're correct. Technically, however, it's intellectually dishonest because by them saying they were going to do something, by them signaling, by them being more dubvish in their comments, that was
enough to move the market. So technically they're correct. They didn't actually do something as far as the policy, but they're talking their opinions. Their dubbish sentiment statements were enough to move the market. And so you have to understand this. Just talking again back to the job on is enough. The other reason why it's intellectually dishonest. Well, I gotta take a very quick break. I'll tell you whant to
come back. If you just tune in, you listen to the Mark Mass Show talking about the fight between the Treasury and the Fed and how it's going to play out and what you should be doing about it. Don't go away. I'll be back with more a minute. All right, welcome back. If you're just tuned innial listening to the Mark Mass Show, we're talking about the battle between the Fed and the Treasury. I know they're both part of the US government, right, they should probably be getting along,
but they're not. The reason why they're not is because they have different agendas. Before we get into what the different agendas are, I want to go back to the point I was making before the commercial break, which is why a lot of these very smart analysts are factually correct, technically correct but intellectually dishonest. So he talked about how they'll say, well, they didn't do anything. The didn't they didn't change rate policy, they didn't increase liquidity, so didn't
do anything. But just their sentiment, just what they said, does it matters a lot, as we saw in October, as we just saw just this week, so we can see that. The other reason why is because they get too technical. So, for example, quantitative easing is when they're easing monetary policy, so tight monetary policy loose monetary policy,
if we think about it like that. The problem is these analysts getting too smart for their own good, have a very specific technical definition of quantitative easing, and so if the Federal Reserve does easing, they inject liquidity through other means, they would say, well, that's not technically quantitative easing. So for example, when the banks collapsed in March of twenty twenty three, they set up a new funding facility called BTFP Bank Term Funding Facility. They gave over one
hundred billion dollars to the market. That was easing. In my opinion, it propped up the market. It showed demonstrated to the world that the Fed put was active, and we saw the markets take off because of that, but the analysts are going to say, well that's not QE. Okay, you're right, and so the words are starting to lose definition, right, and so we're starting to see it. The other reason why I think they're wrong is again they don't understand.
They're so smart on the technical analyst side, they're not taking into consideration other elements such as like human psychology, human greed and things like that, and those are important to understand. When it comes to trying to guess what somebody's going to do. You have to look at all of the reasons that they have in front of them, not just the technical, data driven ones, but you have to look at human incentives and things like that. I think that's why they're wrong as well. Now back to
the true constraints. So the problem with the Federal Reserve is they're sort of boxed in, right, They're fighting between the Treasure and the Fed, and they want to continue to raise rates, make money more expensive, to slow down inflation. But the problem is as they do that, it starts to drag on the economy, starts to you know, it push. Their goal is to bring stock prices down, home price down things like that. The problem is when that happens is that you and I feel less wealthy, but we
are a little bit less wealthy. So you're not selling as many stocks, and there's no capital gain taxes you're paying. You're not selling your home, you're not paying capital gains taxes. And when you're not paying those taxes, then the government, the US Treasury, doesn't receive as much tax revenue. So that's problem number one. The income for the government goes down,
but the government's spending more money. The government needs more income to keep up with is high spending, but the income goes down, and at the same time, as the FED makes the debt more expensive, the Treasury's expenses go through the room. So the Treasury's income goes down, we're not paying taxes, and then their interest goes up because of the rate increases. And so the FED, by trying to fight inflation, is actually fighting against what the treasury wants.
The Treasury needs their income to go up and their expenses to go down, which is the opposite of what the Treasury is doing. Now. A lot of people might say say that the FED is doing this. They will agree with me, but they'll say that the FED wins. But I would say, again putting my psychologists hat on, my human incentive hat back on, if I would, I understand the FED wants to regain control, they want to regain some legitimacy. They need to show that they can
stop inflation. However, at what cost. You see, if they fight against the Treasury and they end up putting the government bankrupt out of business, then the dollar they're trying to protect basically falls apart as well. You see, they're all operating within these constraints. Now. The FED is losing a massive amount of money due to their own policies, but they're sort of putting those off of book. They're
not really seeing those now. Like I said, I've been talking about this fight between the FED and the Treasury at length, probably over the last year. I've done several videos on my main YouTube, chanel Mark Moss about these. If you want to get more into that, just go to my main YouTube channel, Mark Moss and just search that.
You'll find a bunch of videos talking about that. But what I want to talk about specifically is where we're at right now and what the Treasury is doing to force the Fed's hand and how this is playing out and what we should be doing about it? All right, now, the Treasury is in a tough spot. They don't like this. As I said, their income went down, their expenses went up. As a matter of fact, their expenses. The interest on the debt, because now it's more expensive, has now exceeded
one trillion dollars just an interest alone. Now money is just going into the ether, if you will. And to think about how incredible it is to put it into some sort of numbers, it's now more than what the US government spends on its military. And that may not mean much to you, but for a frame of reference, the US spends more on its military than the next ten countries combined. So more than Russia, more than China, more than Iran, more than Brazil, more than all of
them combined. Right, it's not just a big number, it's a massive number. And now we're spending more on our debt than that. To put it into another frame of reference, it took the United States government two hundred and five years to get to one trillion dollars in debt. Now we're thirty five trillion dollars in debt. But just the interest on the debt just the interest alone is more than what it took the government two hundred and five years to accumulate. It's amazing. So this is where the
government is. They have to get this interest right down. That is the battle that we have. The FED needs raids up. They need them higher for longer to cool the market, to tame price and asset inflation, so they can regain the world's confidence. Right They've been in this tightening stance for over two years. But the Treasury they need the Fed to raise rates or lower rates back down.
They want the Fed to switch back to easing, and they want it for two reasons right right, One they want to get the market's economy going so tax refeats go back up, and two they need the interest rate to go back down. Now, as this plays out, I believe they are forcing the Fed's hands. I believe this's actually they've taken over the last couple months that as much as Jerome Power wants to do job owned the market to cool down, it's not gonna cool down. We
already know what's coming. If you're paying attention to this, I'm gonna tell you more. But I also want to let you know that next week I have a live event that I'm doing. It's not gonna be here pre recorded, It's gonna be live, and I'm gonna show you how to seize the upside of the Fed's you turn that's coming this year while side stepping market volatility. You can
join me live. I have about thirty five slides. I'm gonna show you ish thirty five ISH and I'm gonna do all live Q and A. So if you have questions about this, you can ask me. Go dot one, Markmoss dot com, slash you turn again. That's go dot one, Markmoss dot com, slash U turn. But getting back in to sort of frame this up, like I said, we know the Fed's gonna pivot. Is it gonna be three times or six times? We don't know. But Jerome Power just kind of came out and said, oh, we're gonna
drag our feet little bit. We're gonna try to push out from March until May. They say they want to push out as far as it can be pushed out. And so Jane Allen and the Treasury is like, Nope, that's not gonna work for us. We need it much sooner. We have all this debt that we need to refinance. We need rates to come down, and so we're going
to have to force you into action. Now. Depending on who wins this policy battle, there's going to be very different outcomes for the economy, for the market, for our portfolios, and all of that. But if we want to dive into what the Treasury is doing right now, and we're and we can see what's going on in the market,
so it makes better sense to you. We can see that historically, when the Treasury issues debt, right, they sell bonds to issue debt, on average, about twenty percent of the money raise comes from the sale of short term debt or less than one year's maturity. Those are what
we call bills. The other eighty percent of the debt they sell are in longer term notes and bonds because notes and bonds carry interest rate or what we call duration risk, whereas the shorter term maturity bills they generally don't, So that way their effects on marketing the economy they differ substantially. Right, if I borrow money for longer, you want some more return. If I borrow twenty bucks off tomorrow, you don't really care. If you're just tune in, you're
listening to the Marcomas Show. We're talking about the battle between the Fed and the Treasury, and we're going to talk about how this is going to play out in twenty twenty four, how the Treasury is forcing the Fed's hand. But I'm gonna take a very quick break, but I'm going to be right back. You don't want to miss what's coming up next, so don't go away. I'll be right back. All right, Welcome back. If you just tune in,
you're listening to the Mark Mass Show. We're talking about the battle between the Treasury, the US Treasury with Janet Ellen and the Federal Reserve and Jerome Powell, and how that's going to affect markets this year in twenty twenty four. Now, I was talking about how the Treasury is taking action to force the Fed hand. The Fed is the Treasury needs policy to ease, They need rates to come back down.
The Fed wants to keep them higher for longer. Jerome Powell just had their meeting and he said that we're going to keep them higher for longer than most people want. And Janet Allen's like, uh no, you're not. I'm going to force you into action. So how is she doing that? Well? I was saying, as they issue debt, they have to sell bonds, bonds, bills, notes. Twenty percent is short term,
eighty percent is long term. That's historically, But what we're seeing right now, if we dig into the bond market, we can see that instead of historically the eighty twenty net issuance on the short term bill side, in twenty twenty three we saw a net issuance of almost two trillion dollars in bills and negative net issuance in the longer dated notes. So what does that mean. What that means is that more notes were redeemed in dollar terms
than they were issued. And as far as I know, we haven't seen negative net issuance in notes since the Clinton era surpluses. It's been a long time. And it's not just that they're easing up on the note issuances. What they've done is they've brought it down to negative. And the key pieces right here is that they're front loading everything they can into short term bills. So normally they sell on the long end, right now they're selling on the short end. Now, if you look at some charts,
you can see just how extreme this is. But they are really loading this in now again to catch you up. Bills are short term paper, so that's typically you know, less than a year. Notes are longer dated two years to ten years. Right now, I've talked about this, you
probably heard me. Many people, include myself, have thought that the Treasury had no choice but to issue all these bills on this short side because interest rates were so high, and they were pushed up and they were held high by the Fed, and the Treasury didn't want to lock in that debt long term, right, so we just had you know, zero percent one percent rates. And I thought the Treasury should have locked all that long term dead in at zero percent, Like why didn't they now it's
at five percent. They don't want to lock it in for thirty years or ten years at those levels. And so I thought Janet Yellen was like the worst trader in history. We have all these homeowners like myself locked in some mortgages thirty year mortgages in the three percent range. You have all these corporations who locked in long term corporate debt at these rates. But yet Yellen, who probably knew more than anybody had insider information, didn't lock in
the government at those rates. So I thought that was a pretty big mistake. But now that I'm looking at this from a different lens, it looks like what's happening is she's loading it all on the short term rate to force the Fed's hands. It looks like it's deliberate by yelling and the Treasury to fight against FED policy and then ultimately force them into taking action the action they don't want to do. Now, there was an article I was just reading by Steven Moran. He's from the
Manhattan Institute. He's a former senior advisor at the US Treasury, just in twenty twenty one, so he's pretty in tune with the inner workings over there. He said that quote, the Treasury Department has offset QT quantitative tightening by increasing the share of total issuance for bills far beyond the norm. That's what I'm saying, right. Traditionally there's more on the back end. Now they're doing it much more on the
short end. He goes on to say the increased duration risk that QT quantitative tightening supplies to the market has been nullified by the reduced duration risks supplied to the market by changes to the Treasury's issue, it's profile and political actors at the Treasury have managed to run rough shod over the stance of monetary policy end quote. So he said it right there, he said, the Treasury is running rough shod. I don't know if you know what that word means. I had to look it up. I'm
just kidding. But in normal like non FED speak, basically what that means is the Treasury is having their way with the Fed. Right, it means that the Treasury is forcing their will on the FED. They're forcing their own agenda on the FED. So a lot of people think the Fed's going to win. As I kind of laid out before I even went into this, them winning means the government loses. That's probably not going to work out. And as we can see right now, it looks like
the Treasury is having their way. So how exactly does it do this? What's the mechanism there? So what happens is by issuing so many short term bills, the Treasury is effectively printing money. Now, the FED is in quantitative tightening, they're trying to tighten the money supply, but the Treasury is effectively printing money by doing this, which counteracts them.
In the article that I was just read, and Stephan ron is saying that Janet Yellen is draining the reverse repo facility on purpose, so the Fed is forced to stop quantitative tightening. He says, quote, by increasing the bill issuance, the Treasury ensures the RRP drains more quickly. By keeping bill issuance high, the Treasury is able to not only to counteract quantitative tightening performed by the Fed, but also is the key piece, but also to force the Fed
to taper QT or to shut it down. This is an abomination monetary policy under the control of fiscal authorities. H That's what he said. So let's think about that for a minute. Now, you hear a lot of people, will probably other analysts on TV, on YouTube, et cetera, talking about the reverse repo window. Now, the reverse repo is where banks put money with the FED and it goes to overnight settlement. And we saw that number explode
after the pandemic, and now it's being drained. A lot of people you'll find no shorts of people saying that as this gets drained, it's a big problem. And once it hits zero or close to that, back to normal means it's going to be a big problem. And the whole thing is going to come crashing down. That's what
they'll say. However, basically, what this article from Steve Mourana is saying a Treasury person, he's saying that they're draining the RRP on purpose, and the reason they want to drain it on purpose is so that the Fed is forced into easy and back into the market again. Now, why would Yellen try to force the Fed back into quantitay easing from a tightening position. It's a good question. Now, before I answer that, let's look at the Fed's dilemma. Why would the Fed not want to do that? Why
would it be a disact? Why do they have to be forced into it? Why don't they just adopt it? Right? Well, it's because the Fed has a dual mandate. Now they probably have a third mandate, but they have a dual mandate one stable prices, two full employment. Now, if we look at the stable prices side, how stable have prices been? It looks like the price of everything went up by about fifty per Now prices are coming back down on certain things. They're anything but stable. Their goal is two
percent price inflation. So even though inflation is stepped, it's still in our purchasing power still in our life, if you will. At least, if it's at two percent, it's predictable as much as they're going up. The problem is when it goes from zero percent to negative percent to nine percent like we saw, then it drops all the way back down to two or three, and that's anything but stable. And when it's not stable, how do we plan our lives? And more importantly, how do we plan
our businesses? Do I buy supplies now and lock in the prices now or do I wait till later, like when during the pandemic, like lumber shot through the roof, Oh my gosh, is it going to keep going higher?
Or should I lock it in right now? When everything is shooting higher, people are rushing out to buy things, and so they obviously didn't keep things stable, say the least, then they have the full employment right, and so we can see that that inflation wrecking ball messes up a lot of things, messes up the way businesses can operate, and mess up the way the economy works, and more importantly makes the FED look horrible, because again they have
a mandate. If they can't achieve their goals they want to achieve, then what do we have them for anyway. They you know, let's let's look at some of their truck. They told us that inflation wasn't a problem. They couldn't get inflation. We can't get enough. We're gonna keep going, going, going, he said, Joe, and prose, we're gonna let it run hot. We're just gonna we're gonna overstimulate the market. And then if we overshoot our targets so up, then as we
got the inflation, it's not a problem. It's not a problem. It's not a problem. Then it's transitory it you know, it's gonna go away. Then it ran way too hot, and then eventually they were forced to scramble. And then they scrambled so fast at this knee jerk reaction. And now they went too far right. Now they've gone too far and too fast the other way, tightening everything back up.
And I think, you know, in their sort of race to their desperation to regain confidence, the confidence of the people, the government and the government, uh you know, Powell and the Fed, they're so focused on the war on inflation that they've let it just go too far right. And as I said before, in order for the FED to win the war of inflation, then the Treasury has to lose. It's a zero sum game here, that's the problem. They've
been trying to play this dance. But the end of the day, the Treasury is gonna have to get their way. So that's the stage for the battle. That's the stage we've been watching over the last year. It's the stage I've been talking about for a long time. Now I'm gonna tell you how you can play this, how we can set ourselves up to profit from this and not lose. I'm gonna break that down for you in a minute.
But if you're just tune in you're listening to the Mark Mass Show, I'm gonna be back with what I think happens with the Fed and the Treasury battle that's playing out, and how we position ourselves to profit and sidestep the volatility. So'll be right back. Don't go away,
all right, Welcome back. If you're just tune in, you're listening to the Mark Mass Show, we're talking about the battle between the Fed and the Treasury and what happened as this plays out, who ultimately wins, and more importantly, how we win regardless. Now we've already seen the Fed pause on raising rates, right, they paused them, and then they started raising them again, and now they paused them again.
And like I said, they're admitting that we're going to have lower rates this year, but they're dragging their feet, right, They're trying to delay the cuts as long as possible. But if we go back to the question that I posed earlier, that I told you, I answer, why would Yellen try to force the Fed back into qe would? Why would why would she want them to go from QT tightening back to easing? And I already told you why they wouldn't want to, But why does Yellen want that? Well,
it's a math problem. It's a math problem, and it's a political problem. Let's start with the math first. So let's look at the math. If the Fed sells ten year notes, ten year paper at five percent, then that rate,
the five percent, is locked in for ten years. And the problem with locking in that money for ten years is the Treasury can't afford that in order to afford the debt that we have now, but more importantly, the death that's about to come for the rest of the year probably, I mean, we've been adding a trillion dollars every quarter I will probably add another trillion dollars of debt this year, So not just the debt that we have, but the debt we're going to add in order to
afford that. Janet Allen, the Treasury needs rates to be back to zero. She wants to get rates back down potentially close to zero before she starts issuing the notes, the longer duration notes in any serious quantity, and she needs to issue some serious quantity to keep the government's runaway spending programs going. They cannot quit spending. I think it was two point seven or I think it was two point seven trillion added to the national debt last year.
My guess is it's over three trillion this year, specifically in an election year with wars going on, and more importantly,
because the government just continues to grow. You know, I thought, you know, when I was watching these debt ceiling debates go down, the Republicans that thrown out an offer to the Democrats saying let's just hold spending down or let's just go back to like spending and where we were in twenty twenty before the pandemic, and I'm like, life wasn't horrible, and you know, before the pandemic twenty twenty, or saying at twenty nineteen like that wasn't catastrophic, Like
why couldn't we just go back to spending like we did in twenty nineteen, right, Like we had plenty of government programs and social programs and you know whatever the roads were there, Like, why couldn't we go back to that? And part of the reason why is because the government has grown so much. If we were to take it back, I mean, millions of people are going to be affected by this. All types of jobs will be lost, and
programs will be cut and things like that. And so the government continues to get bigger and bigger and bigger, and there's no way to reverse that. So they need to continue spending, and they need the rates to be lower ones they can finance that debt. And two, like I said, so that taxes go back up as we sell our stocks, as we sell our homes, things like that, all right now at the current rates, to give you sort of an idea of how bad this is at
the current rates. Right now, the US what we call true interest expense is more than all of the US tax re seats. Now that's just true expenses. What are true expenses. True expenses is what is mandatory, what has to be spent. That's just the interest on the debt and the entitlement spending. So that's Medicare, Medicaid, SEB, security, things like that. That's money we owe to people that has to be paid. That's just that alone is more than all the US tax receeats. So the Treasury is
in a super tough spot now. The last big note issuance when we issued them on the longer end of the spectrum, was back in twenty twenty one when rates were still at zero, and so now Yellen is trying to force the Fed back into that range before she can start flooding the market with those notes. Again, that's why she's trying to drain the RRP with the bill issuance. So that's the math problem, but it's also a political problem.
The political problem is that we're an electioneer and with the economy sort of teetering on the brink, we gonna have a recession? Are We're not gonna have recession. Yellen, who's part of the Bide administration, they have an agenda, and their agenda is to win, right. They want to win the election. They want to maintain power. They want the Democrats to maintain power, and so because of that,
they cannot have a recession. I made a video on my man YouTube channel saying they couldn't afford a recession. They can't afford a recession because if there is a recession, that means tax receipts go down even more. Remember the spending doesn't, just the income goes down. They can't afford what they have now, how could they afford it in a recession? They can't. And so because of that, Yellen
is trying to force their hands. She's continuing trying to stack the short term paper, continuing to drain the RRP. Now will she win? Is that checkmate? Or do you know? Does the Fed have another rabbit out of their hat? Do they fight back? Well, my guess. Before I guess, let me tell you. Let's see. I think as I kind of started out by saying, one of these financial analysts who are smarter than me and a lot of the inner workings and plumbings of this, but maybe fail
to look at other things. They don't look at all the information in my opinion, right, so one of the things like Harry Dent Junior, I hate to pick on him. I think his work is brilliant. I've read five of his books. I continue to read his books because his research is correct. The assumptions are wrong, And the reason why the assumptions are wrong is they fail to take into consideration how many magic tricks the FED has up their sleep. So, for example, when the banks collapsed, Oh
my god, this is it. The whole thing's crashing down. Okay, Sure, or they just paper over it and they just take that debt on their books. Oh but Mark, don't you know that the commercial real estate mortgage security market is going to crash two point nine trillion dollars going to sink all the regional banks. Sure, or the FED just takes all those bonds on their books. I mean, they've taken real estate bonds on their books before. Oh but Mark,
don't you know there's a receession coming. All these people are going to lose their job. Yeah. Sure, the government just sends everybody a thousand dollars STEMI check, like they did just a couple of years ago. Right, You see what I'm saying. And so the point is is that these are the things that we already know about. How many other things can they come up with that we don't even know about. And that's the point that I try to make on this. It's like, look, we think,
we keep thinking it's going to be checkmate. I thought it was going to be checkmate back in twenty twelve, A lot of people did. Harry Dent's been calling for a crash for twelve years. Now, eventually they'll be right. But how many more tricks stay up their sleeve? So is it checkmate or are there more tricks of their sleeve? Well, I think it's checkmate in a sense that they're going to force the FED into action. Now, some of it when it's not checkmate, is that it's going to be hidden.
It's gonna be obfuscated. They're gonna say, well, we're not easy, sort of like they're still officially in a quantitative tightening mode, but they injected one hundred billion dollars into the banking industry, so they're in tightening. However, they're actually easing, so their potential policy stance could say the same. So for example, maybe they don't lower rates as as soon as maybe people would think, but they start injecting liquidity into other places.
So there's a lot of games that they can play here. And that's the point. However, back to these smarter people are factually correct, intellectually dishonest, factually, it might not be a pivot factually technically, but it could still be easing in a hundred other ways. Right, And so for you and I, we don't need to get into the weeds on this. We just need to know are we in easy or are we untighten? Is the Fed going to push prices up? Are they going to push prices down?
And in my opinion, it's going to push prices up. I've been talking about this for a year and a half. I am an inflation bowl. Look, this isn't good. It's not good at all. As a matter of fact, it's worse. Having prices crashed back down would be better because at least it gives us another chance to get back in. It gives my kids a chance, the millennials a chance to get back in. The problem is, I don't think
that's going to happen. I think it's going to continue going higher, higher, higher, which sounds good if you own assets, but it's worse for society. It's worse for most people. We'd like things to reset. So we all have a chance to get back in the game. It's like if you're playing a board game and you got out or you haven't got a chance to get back in. You're waiting for the game to be reset so you can jump in and play the game with everybody, or you can get back in. But if they don't ever reset
the game, then you don't get in the game. And that's exactly what it looks like is happening now. If you want to know exactly what is going on with this from a much more detailed level, I'm having a live presentation. You can join me live hang out. It's titled Seize the Upside of the Feds You Turn in twenty twenty four Walls side Stepping the Market of All Tilly. If that sounds interesting, come join me live. I've got a whole bunch of charts and graphs I want to
show you, not just talk to you about. Go to go dot one, Markmoss dot com, slash you turn to join me. Not only am I going to go through all the charts and graphs, I'm gonna answer all your questions live, So we're gonna be hanging out. You're gonna ask the questions. I'm gonna be answering them. Just go to go dot one, Markmoss dot com, slash you turn, go dot one, Markmoss dot com, slash you turn, join me live and uh boy, that's what I got. This
is what's happening. It's happening this year. It's all going down. I believe that it's sort of checkmate. Maybe not officially, but the FED is going to be easy and they have to with then do any good to put the government out of business. Anyway, you're listening to the Mark Mash Show talking about this topic. Hopefully that makes sense. Let me know if you're listening on hit me up on social media. And that's what I got. Thanks so much for listening.